Portfolio Manager Lee Kronzon of Gator Capital Management says AMERCO (UHAL) is a very high-quality business and an attractive investment for many reasons.
“AMERCO is the industry leader in North America as the largest do-it-yourself moving truck and trailer rental firm. But AMERCO is also the second-largest self-storage facility operator in North America. Many of AMERCO’s truck rental facilities also have storage facilities attached to them. And that creates a great vertical integration opportunity that many competitors don’t have,” Kronzon said.
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While AMERCO has industry leadership that is important to the company, Kronzon says that the company benefits even more so from high entry barriers, and that its vast network is its competitive moat.
“That gives AMERCO a network effect: The more locations it has, the more attractive its services are to customers, and as a result, the more pricing power it has. We estimate that the U-Haul network alone would cost a competitor over $6 billion to replicate from scratch,” Kronzon said.
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